Utah's housing market continued to struggle in July and had the ninth-highest foreclosure rate in the nation, according to a report being released today.
The state had one foreclosure filing for every 472 households, up 27.32 percent from June 2008 and an increase of 294.02 percent over the same month last year, the report from RealtyTrac, based in Irvine, Calif., said. In June, Utah ranked 10th nationally, with a rate of one foreclosure for every 600 households.
The four Utah metro areas in July all ranked among the nation's top 100 for the highest number of foreclosure filings. St. George ranked 17th, with one foreclosure for every 163 households. The St. George area saw a 51 percent increase from June and a 1,192 percent hike from July 2007.
The Provo/Orem area ranked 39th in the report, with one foreclosure filing for every 260 households a 13 percent climb from June and a whopping 17,000 percent jump year over year.
Salt Lake City ranked 70th nationally, with one filing for every 491 households in foreclosure, a 35 percent increase from June and 146 percent higher than July 2007. Ogden/Clearfield was 100th in the nation, with one filing for every 660 households 32 percent higher than June and 102 percent higher than July of last year.
With so many Utah communities affected by the housing downturn, local real-estate experts say the increasing number of foreclosure filings is beginning to hurt property values.
"It depends on how many foreclosures are in that neighborhood and if those foreclosures have been taken care of," said Jillinda Bowers, president of the Salt Lake Board of Realtors. She said if the homes with foreclosure filings were in deteriorating condition, then the value of that house and others around it would be negatively impacted.
Nationwide, foreclosures rose nearly 8 percent from the previous month and jumped 55 percent from July 2007. One in every 464 U.S. households received a foreclosure filing during the month, according to the RealtyTrac report.
Nevada had nation's highest state foreclosure rate in July, with one in every 106 households receiving a foreclosure filing, up 15 percent from the previous month and 97 percent year over year.
California ranked second, with one in every 182 properties receiving a foreclosure filing during the month. Florida was third, with one in every 186 properties receiving a foreclosure filing.
The RealtyTrac report provides a count of the total number of properties with at least one foreclosure filing reported during the month, broken out by type of filing at the state and national level. The report incorporates documents filed in all three phases of foreclosure, including default, auction and properties that have been foreclosed on and repurchased by a bank.
Cape Coral-Fort Myers, Fla., registered the highest foreclosure rate of the 230 metro areas tracked in the July report. One in every 64 households in that metro area received a foreclosure filing during the month more than seven times the national average, according to RealtyTrac.
Merced, Calif., ranked No. 2, with one in every 73 households receiving a foreclosure filing, and Stockton and Modesto, both in California, tied for third-highest, with one in every 82 households receiving a foreclosure filing.
Wells Fargo economist Kelly Matthews said that compared to the situation the state experienced in the early 1980s when there were also numerous foreclosures. The current Utah market is not quite as dire.
"We had all of these properties that had gone through the entire process and were actually owned by the bank," he said. Banks during that time had to dispose of those properties, but in recent months, that really hasn't been the case thus far in Utah.
Last month, President Bush signed major housing legislation aimed at preventing foreclosures by allowing homeowners to switch their mortgages for more-affordable loans, but only if their lender agrees to take a loss on the initial loan. Matthews said it remains to be seen how much the government's intervention will impact the current housing crisis.
He said that the worst of the housing downturn may still be yet to come and added that the foreclosure rate in Utah could continue to increase through the rest of the year."The problem won't be solved next year, but we may begin to climb back out of the hole sometime on into next year," Matthews said.